CNY FINANCIAL

The Bank is a community-oriented savings bank whose business primarily consists of accepting deposits from local customers and investing those funds in residential mortgage loans in Cortland County. The Bank had $103.3 million of residential one- to four-family mortgage loans at March 31, 1998, representing 66.0% of total loans and 44.5% of total assets. Based upon data as of June 30, 1997 published by the FDIC, the Bank's share of total FDIC-insured deposits within Cortland County was approxima... tely 42.1%, the largest share of any bank in Cortland County. The Bank is the highest volume residential mortgage lender in Cortland County, measured by number and dollar amount of mortgage loans. The Bank also makes residential multi-family loans, commercial mortgage loans, credit card loans, commercial business loans and consumer loans. At March 31, 1998, the Bank's loan portfolio, net, totaled $154.2 million, or 66.4% of total assets. The Bank's loan origination and related loan servicing activities are conducted primarily by Bank personnel, but from time to time the Bank obtains commercial mortgage loan opportunities and, to a lesser extent, residential mortgage loan applications, through loan brokers or other referral sources. The Bank also obtains automobile loan referrals from automobile dealers.More